Former Hawaii defense contractor Martin Kao pleaded guilty to conspiracy and other charges Tuesday in federal court for funneling nearly $200,000 in illegal campaign contributions to political action committees supporting Republican U.S. Sen. Susan Collins in her 2020 bid for reelection.

It was his second guilty plea this month.

The first came on Sept. 7 when he admitted to bilking the federal government’s Paycheck Protection Program out of more than $12.8 million that was meant to go to small businesses struggling to stay afloat during the height of the coronavirus pandemic.

U.S. Sen. Susan Collins, center, poses for a photo with Martin Kao, second from left, during an August 2019 celebration of an $8 million contract award for his company Navatek LLC. U.S. Sen. Susan Collins/2019

Kao is the former president and CEO of Navatek LLC, a Hawaii-based engineering firm that has received millions of dollars in defense contracts, most notably to conduct research and develop state-of-the-art hull designs for the Navy.

He has since been removed as the head of the company, which has been renamed PacMar Technologies.

On Tuesday, Kao appeared via video conference in U.S. District Court in Washington, D.C., to take responsibility for side-stepping laws meant to combat corruption and provide transparency in electoral politics.

It was a relatively uneventful hearing, with Kao mostly responding to questions from Judge Carl Nichols with a simple, “Yes, your Honor.”

At the time of the indictments in February, Collins’ campaign said there are no allegations of wrongdoing by the Collins for Senator Campaign, according to The Washington Post.

“As stated previously, the campaign had absolutely no knowledge of any of the allegations against Mr. Kao or his associates until a search warrant was reported in the press,” the campaign said in a statement to newspaper.

According to the U.S. Justice Department, Kao and two of his top executives, Lawrence Lum Kee and Clifford Chen, created a shell company to donate $150,000 to a pro-Collins super PAC after she helped secure funding for an $8 million contract for work in her home state of Maine.

Kao, Lum Kee and Chen also each donated directly to Collins’ campaign, and are accused of giving money to family members to bolster their own contributions and “gain favor” with Collins, who is identified in court records only as “Candidate A.”

In many cases, the donations were made using company funds, which is a violation of federal law that prohibits government contractors from contributing directly to political campaigns.

Prosecutors obtained internal emails showing how Kao and his alleged co-conspirators executed their scheme to set up the shell company and coordinate their donations even though he had already maxed out his own personal contributions to the senator’s campaign.

Kao even reached out directly to Collins’ campaign finance director to let that person know that more money was on the way after receiving the $8 million contract.

“We are here to help any way we can … financially or whatever,” he wrote.

In total, Kao and his cohorts donated almost $67,000 directly to Collins’ 2020 campaign.

At the time, she was considered one of the most influential swing votes in Washington and had played an outsized role in key decisions related to the confirmation of U.S. Supreme Court Justice Brett Kavanaugh and then-President Donald Trump’s impeachment.

Her decisions in those instances drew the ire of those on the political left who raised millions of dollars in an attempt to oust her from the Senate.

According to Kao’s plea agreement, he is guilty of four separate counts, each with a maximum penalty of five years in prison. He is scheduled to be sentenced on Feb. 9.

A jury trial for Chen and Lum Kee is scheduled for April.

The criminal charges against Kao, Chen and Lum Kee follow a complaint that was filed with the Federal Election Commission by the Campaign Legal Center over the $150,000 made to the pro-Collins super PAC.

A subsequent Civil Beat investigation tied that donation to Navatek and the $8 million contract it received in August 2019.

Read the Justice Department’s statement of facts that Kao pleaded guilty to:

An Important Note

If you consider nonprofit, independent news to be an essential service that helps keep our community informed, please include Civil Beat among your year-end contributions.

And for those who can, consider supporting us with a monthly gift, which helps keep our content free for those who need it most.

This year, we are making it our goal to raise $225,000 in reader support by December 31, to support our news coverage statewide and throughout the Pacific. Are you ready to help us continue this work?

About the Author